CEG SolarGEN CampaignSolar 101

Be Part of the Capital Regions “Solar Generation”

Peter Lion, Program Manager, Energy & Sustainabilitypeterl@ceg.org – 518-465-8975 x234

Introduction

• Introduction

• SolarGEN

• Quick Solar Overview

• Key Solar Financial Incentives

Introduction• Excellent Solar Candidates are those who:

– Can recoup approximately 60% of the total project cost through tax credits ( Federal ITC & MACRS)

– Have a significantly under-utilized roof or ground area available (currently non-value add space)

– Are concerned about escalating energy costs

• Why go solar– Proven and reliable technology that locks in electrical rates for 30+ years– Federal and State incentives reduce overall project costs for project

ownership or third-party owned scenarios– No moving parts means minimal operations and maintenance costs– Allows you to choose local power, supporting local jobs– Supply chains are increasingly looking for companies implementing green

practices

CEG SolarGEN saves you time and moneyCEG SolarGEN is a collaborative solar procurement initiative. Collaborativesolar procurement is an established practice that:• Diffuses barriers for participating customers and participating developers

• Actively engage their targeted community providing solar education and geographically localizationof participating organizations

• Lower soft costs for participating customers by providing vetted developers, vetted equipment anda discounted baseline price.

• Customers focus on economics of the project not on selecting from the 100+ certified developersor having to compare equipment

CEG SolarGEN Process - 3 bids in 3 weeks – roughly 8 hours of time invested

1. Fill out CEG SolarGEN Site Profile – time dependent on customer

2. Developers receive profile, review site information & begin designs

3. CEG schedules 4 hours for a site visit and one-on-one meetings with 3 developers

4. CEG schedules 3 hours for developers to present opportunity (only needed if walk-thru generates changes that might impact price)

The SolarGEN Value

• Save time vetting developers and prospecting equipment options

• Below Market per Watt Installed Rates

• Quickly receive 3 site specific bids from vetted contractors

• Lower your operating budget for next 25 years

Developers Selected

Small Commercial (under 200 kW) Large Commercial (over 200 kW)

Apex Solar Enter Solar

Monolith Solar Montante Solar

Solar Liberty Solar Liberty

• All developers are New York based organizations• Have won competitive BIDS with municipalities, universities

and manufacturers and state contracts• Provide turnkey systems• Combined the developers have installed over 298 systems in

the last 12 months

Baseline Pricing Defined• Discounted baseline pricing has been established by each

developer

• As a system increases in size the price decreases

• Project adders exist for site specific issues – roof reinforcement, electrical panel upgrades, installs on multiple roofs, etc.

• SolarGEN reduces soft costs which is passed onto participants through discounted baseline price– Soft cost are reduced by - gathering site information, customer

acquisition, larger pool of participants = economies of scale

Solar Modules

Inverters

Mounting System

Monitoring System

Solar Power Basics• Solar Systems generate electricity by

converting light energy into electrical energy

• Solar Systems are comprised of 4 parts

• Systems are interconnected to the electrical grid to receive NYSERDA incentive

• Onsite or offsite systems generally generate the greatest monetary value when exporting all generated energy directly to the grid through a new meter

Solar Basics – Solar Modules

• A proven technology with a 30+ year life

• No moving parts

• Manufacturers provide product (10yr) and production (25yr) warranties

• There is limited maintenance requirements

• Panels are extremely durable

• Most widely implemented panels are silicon crystal panels with efficiencies ranging from 15% to 22%

• Solar modules consist of solar cells encapsulated in a glass panel. Modules are connected to each other and then to the inverter

Solar Basics – Inverters• Inverters convert the direct current (DC) generated by the solar modules to usable alternating

current (AC) electricity

• String inverters are commonly used on large commercial projects as they are cost-effective at grouping modules which have the same orientation & are on the same plan

• If a portion of your roof is shaded more costly power-optimizers and/or micro-inverters should be considered

High Reliability High Efficiency Fully Integrated Systems

Long Life (12 years) ~ 10 year warranties Outdoor/indoor rated options

Solar Basics – Mounting SystemsMetal Roof Mount

Flat Roof Mount

Carport Array

Ground-Mount Array

Solar Basics – Monitoring• Monitoring provides real-time technical and financial performance of a solar

system and provides an attractive way for any organization to demonstrate its sustainability leadership– Displays – daily, weekly, monthly, annual and lifetime data

– Includes environmental statistics such as: barrels of oil saved, emissions saved, equivalent trees planted, car miles saved, etc.

• Remote services enabling monitoring by developer and O&M provider

Multiple Paths to “Go Solar”• The solar industry has developed multiple paths to install solar energy that

conform to the individual needs of an organization

• Direct Ownership

• 3rd Party Ownership

Direct Purchase PACE or Debt Finance

Power Purchase Agreement (PPA)

(reduced cost)

Solar Operating Lease

(7 year lease, path to ownership)

GO SOLAR

Solar Incentives – Federal & State• Federal Investment Tax Credit & MACRS

– Declining over the next 5 years

• Megawatt Block Rebate Program– Incentives are provided on a first-come, first-served basis for qualified

projects.

• Solar Property Tax Exemption– 15 Year Property Tax Exemption, municipality could have opted out

• Value of Distributed Energy Resources (VDER)– Announced in March 2017, VDER replaces net metering by

compensating solar generation with monetary credits which will be used to buy down your electric bill

Federal Solar Incentives• If tax credits can be monetized by an manufacturer or business they are able

to typically recoup 60% of the total project cost

Tax Credit – 30% of system cost Accelerated Depreciation (~30%)

Section 48 Investment Tax Credit provides a dollar-for-dollar reduction in cash taxes in an amount equal to 30% of the total system cost• Extended at 30% level for projects begun

prior to the end of 2019• Projects begun in 2020 – step down to

26%• Projects begun in 2021 – step down to

22% (must be completed by 12/31//2023)

• 1-year carry-back and 20-year carry-forward of tax credit

Solar projects are now able to claim a 50% bonus depreciation in year 1 while still utilizing the MACRS 5-Year depreciation treatment• Typically provides cash tax savings with a

net present value of approximately 30% of the total project cost

• Bonus Depreciation of 50% through 2017, then 40% in 2018, and 30% in 2019

• 2-year carry-back and 20-year carry-forward

Solar Incentives – New YorkSmall Commercial Large Commercial

• NYSERDA NY-SUN Megawatt Block Rebate Program– Small (200 kW or less) – incentives based on watts installed & awarded at interconnection– Large (200 kW or greater) – incentives based on annual energy produced over three years –

25% awarded up front – 75% distributed over three years– Market implementation dictates decline in NYSERDA incentive– Track Real-time Incentive Levels – Click Here for MegaWatt Block Dashboard

Solar Incentives – New York• Solar Property Tax Exemption - Section 487 of the

RPTL– Provides a 15-year exemption from real property taxation

for the increase in value resulting from the installation of a qualifying system.

– The statute allows municipalities and school districts to opt-out of this exemption. Opt out list -https://tax.ny.gov/research/property/legal/localop/487opt.htm

– If you have specific questions talk to your local tax assessor

• VDER’s value stack attributes monetary values to the components below. VDER encourages renewable energy deployment that maximizes benefits and value to the customer, renewable suppliers, the electric system, and society in order to meet NY Clean Energy Standard goals.

• Value Stack Components– Energy (LBMP) – Day ahead, locational-based energy prices at time of generation– Installed Capacity (ICAP) – based on statewide MW demand peak from previous year– Environmental benefits (“E”) – project’s rate is locked in at interconnection, $.02424 per kWh

currently– Avoided demand (“D”) – Systems impact on the local distribution grid’s peak demand – Location system relief value (LSRV) – additional value for location specific relief on distribution

network defined by each utility

• Exact values for value stack components are site dependent and value is associated with kWh exported to grid

• The most value is generated by exporting kWh to the grid, in most cases installing a new host meter generally enables an organization to offset supply and some delivery (demand) costs

• NY Utilities will begin applying tariff October 2017

Solar Incentives – New York

• Fill Out the SolarGEN Solar Facility Profile

– Solar Facility Profile

• Contact Peter Lion, Program Manager, Energy & Sustainability at CEG

peterl@ceg.org or 518-465-8975 ext. 234

• To schedule the walk-thru and meetings or

• With any questions about how solar works, facility specific questions or about the profile

Solar – Determine Your Facilities Energy Value